If you run a small retail or manufacturing business, you naturally worry about how quickly you can sell your inventory and what prices you’ll receive. Slow sales can torpedo a merchandiser by creating a cash deficit -- a short road to bankruptcy. You can convert your beginning inventory -- the goods you have on hand at the start of the accounting period -- into cash in several different ways.

Merchandise Selection

As a retailer, two of your primary goals are to sell your inventory quickly and meet your profit margins --- the excess of price over cost. The faster you can turn over your inventory, the lower your storage costs and the greater the potential annual profits, assuming you don’t have to drastically lower prices to stimulate sales. If you attempt to speed up you inventory cycle, you might have to arrange for financing to pay for more frequent purchasing. Your best defense against rampant price-cutting is to sell popular items at a competitive price. By analyzing your merchandise sales carefully, you can concentrate on items that sell well and at a price that provides you your required margin.

Secondary Channels

If you have surplus or slow-selling inventory, you might be able to spur sales by finding secondary selling channels. For example, if you have a retail shop, you can explore an online storefront or eBay store to sell items over the Internet. You might also try selling your inventory items at street fairs and farmers’ markets. Seek opportunities to arrange cross-sales with non-competitor retailers. For example, you might be able to sell your jellies and jams at the local bakery. If you own a warehouse, consider turning it into a temporary store hosting a warehouse sale.

Liquidation

If you need to quickly convert your inventory into cash, you can use a liquidator to take the items or arrange an auction. Liquidators offer sales management solutions that can help unload your inventory to wholesalers, other retailers, liquidation stores and online bidders. Sometimes a liquidator will purchase your inventory outright, knowing it can resell the merchandise easily. You’ll have to accept a lower price and you might not be able to recover all of your costs. Liquidators can also hook you into dozens of online auction venues that can help you move your inventory. If you manufacture your inventory, you can have a liquidator deface or rebrand your excess or second-quality inventory to prevent devaluing your brand name.

Considerations

Competition can help you recover more of the cost of your inventory. Rather than selling your entire lot to a single liquidator or wholesaler, you might be able to extract more cash by shopping your inventory to several buyers or auction sites. You might also re-evaluate your marketing programs -- augmenting your advertising budget might spur sales without resorting to liquidation. Marketing channels can include social media sites, billboards, fliers and emails. If you habitually have problems selling your inventory, you might want to examine your business plan and consider fundamental changes, such as a new location or a shift in the types of merchandise you sell.

Resources

About the Author

Based in Chicago, Eric Bank has been writing business-related articles since 1985, and science articles since 2010. His articles have appeared in "PC Magazine" and on numerous websites. He holds a B.S. in biology and an M.B.A. from New York University. He also holds an M.S. in finance from DePaul University.